Google, Microsoft Rivalry Viewed As Squeezing Small Search Shops

Google's slew of new products announced last week made it clear that the company intends to amp up its long-standing feud with Microsoft--a "convicted monopolist," in the words of Google co-founder Larry Page. The new releases came within a week of Microsoft's official release of its paid search product, AdCenter, designed to take on Google.

Now, some say that one consequence of Google and MSN's escalating rivalry is that smaller search engines will be left behind.

"It's the pilot fish of the world who are going to have to worry about what they're going to get from these big white sharks," said David Hallerman, senior analyst for eMarketer. "There's a growing universe of online advertising--I don't think there's that much doubt that Google and Yahoo and Microsoft are going to be big players."

Hallerman echoed Microsoft Chief Technology Officer Ray Ozzie's position that in the search space, only a few companies will have the resources to upkeep the necessary infrastructure, and none of them has any clear advantage. "If you just step back and forget about this year or next year, in five or 10 years there will be very few companies on the face of the earth with both the capacity and the willingness to spend billions of dollars on the capital equipment and operating expenses it takes to field that kind of infrastructure," Ozzie said in an interview with Business 2.0 Magazine. "Microsoft will be one of those, Google will be one of those, and by all indications Yahoo will be one of those. I don't think any one of them will have a substantial advantage."

Not surprisingly, some small search companies disagree that a Google-MSN battle will crowd them out. Seb Bishop, CEO of search engine and pay-per-click firm MIVA--which in January said it had hired Deutsche Bank to explore strategic options, including a sale of the company--said the search industry overall benefits from increased competition at the top.

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